Renewable Energy Makes Up 16% of Estonian Power Consumption

Electricity produced from renewable energy sources accounted for 16% of Estonia’s consumption in the first quarter, an increase from 11% last year. Compared to a year ago, 53% more electricity (388 GWh) was produced from renewable energy sources.

The majority of renewable energy, 69%, came via electricity production from waste, biomass and biogas, with 28% coming via wind power and 3% via hydro power production.

Applications for renewable energy subsidies totaled 19 million euros for the first quarter of this year, which is nearly half as much as in 2011, when the figure was 12.1 million euros. The subsidy payouts increased the most for electricity produced from biomass and biogas, with the amount paid to Narva Elektrijaamad AS (Narva Power Plants) increasing by a factor of over 4.2 in the first quarter. Compared to last year, however, subsidy applications for electricity produced in combined heat and power mode have decreased.

According to Taavi Veskimägi, Chairman of the Board of Elering, the percentage of subsidized renewable energy continues to rise quickly, and the need for a review of subsidies is increasingly clear. “Subsidy payouts have increased primarily for renewable electricity produced from biomass. The amounts paid are significantly larger than the Q1 biomass usage volumes that were forecast by the producers themselves and were used as the basis for the 2012 renewable energy tariff (0.97 euro cents/kWh). If the upper limit on biomass usage subsidies, planned as part of the changes to the Electricity Market Act, is not approved, and the use of biomass continues on the same scale, this year’s payouts that exceed the tariff will have to be added to next year’s renewable energy tariff. That, however, may not mean an increase in the renewable energy tariff to the consumer, because according to the law, this is the last year when renewable energy subsidies are paid for generating equipment that became operational before 2002, including Block 11 of the Balti power plant,” commented Veskimägi.

A total of 348 GWh worth of electricity from renewable energy sources received a subsidy, compared to 225 GWh in the first quarter of 2011.

Application submissions for combined heat and power subsidies fell by 25% compared to 2011, totaling 1.5 million euros. The decrease can be attributed to both reduced production capacities and the producers’ choice of fuel – more biomass is being used in CHP production, and that is subsidized at a significantly higher rate than electricity produced from other fuels in combined heat and power mode.

Compared to Q1 2011, subsidized hydro electricity production has increased from 7.5 GWh to nearly 10 GWh. Subsidized wind power has decreased compared to the same period of last year, from 74 GWh to 70 GWh.

A detailed report on subsidies paid per company is available here.